Review the 'Sun Spots' case on pages 254 in the textbook (Below also). Answer the questions at the end of the case in a post to the forum no later than midweek. In your posts, re-type each question and then type your response to the respective question. Remember, include details, background information from which you base your responses. This is important for an engaging, substantive discussion.

II. Sun Spots

Synopsis

SunDax CEO Dax Hollandsworth turns his leather desk chair from the blinding sunlight streaming through the large office window and leans back, facing Mark Roberts, the company CFO. "I dread the quarterly meeting and video feed," Mark says. "Everyone has been working really hard and they've come to expect the year-end bonus. Hell, they plan for it, their families budget for it."

"I realize this will come as a huge disappointment, but I really don't think it will come as a big shock to them. Do you want some of these?" Dax asks, taking a handful of jelly beans and extending the jar to Mark who takes a few. "They're working their tails off, but I've detected a decline in overall morale. Everyone here keeps a close eye on the industry and on the mood and efforts at the Federal level. They deal every day with the competition from the Chinese, and they see this big trend toward merger and acquisitions. They may not want to admit it any more than we want to say it, but I think they know the bonus pool is empty and they wonder what the future holds."

"I'm afraid that employees will believe we are bending to public pressure in withholding their bonuses or they will think we are holding onto financial assets in order to look stronger for a potential merger or acquisition," Dax tells Mark. "Mergers and acquisitions are the trend right now and some big names have given in. If we are acquired, they can share in the gains." "We're not there yet," Dax says. "Our challenge is to shore up faith in our future among employees while dealing with the realities of the market. But if you say 'look at all of these challenges' and, 'oh, by the way, don't expect a year-end bonus,' what can we offer to shore up that faith and restore enthusiasm?"

Case questions

1. What options can you think of for Dax and Mark to mitigate the damage from unfilled expectations for the annual bonus?
2. What specific steps would you take if you were a senior manager in this situation? Explain why for each step.
3. Do you consider it motivational and equitable when a substantial part of an employee's pay is a bonus based on company results in a highly uncertain environment? Why?